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ANTONII [103]
3 years ago
5

It costs Orkid Company $17 of variable costs and $3 of fixed costs to produce its product. The company currently has unused capa

city. The product sells for $25. Homer Industries offers to purchase 5,000 units at $19 each. In the deal, Orkid will incur special shipping costs of $1.50 per unit. If the special offer is accepted and produced with unused capacity, net income will:
A. increase $2,500.
B. decrease $5,000.
C. increase $10,000.
D. decrease $30,000.
Business
1 answer:
olchik [2.2K]3 years ago
4 0

Answer: Option (A) is correct.

Explanation:

Given that,

Variable costs = $17

Fixed costs to produce = $3

Product sells = $25

Homer Industries offers = 5,000 units

Unit selling price = $19

Shipping costs = $1.50 per unit

Net profit = Unit selling price - Variable costs - Shipping costs

                = $19  - $17 - $1.50

                = $0.50

Total increase in profit = 5000 units × Net profit

                                      = 5,000 × 0.50

                                      = $2,500

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ser-zykov [4K]
Beginning balance 10000
Add service on account 50000
Less ending balance 12000

Received from customers
10,000+50,000−12,000=48,000

Hope it helps!
8 0
3 years ago
Treasury stock that was purchased for $2,500 is sold for $3,000. As a result of these two transactions combined, a.income will b
Fantom [35]

Answer:

The stockholder's equity will be increased by $500

Explanation:

While stockholders equity is the amount of assets available to shareholders after all liabilities have been settled , treasury stock is the stock that is bought back by the issuing organisation with the aim of reducing the number of outstanding stock in the open market.

Looking at the scenario given , it was an indirect way of raising fund and increasing the equity of the stockholders equity as the treasury stock was later resold at a higher price.

Therefore , the stockholder's equity increases by 3,000- 2500 = 500

4 0
3 years ago
If workers and firms have rational expectations, they understand that ________ monetary policy will raise the inflation rate, so
Deffense [45]

Answer:

<u>expansionary; will be equal to</u>

Explanation:

<em>Remember</em>, monetary policies are basically divided into:

  1. expansionary monetary policy, and
  2. contractionary monetary policy.

Indeed, as the name implies, the expansionary monetary policy is meant to in a sense boost up economic growth in terms of reducing interest rates thereby theoretically increasing spending and also leading to an increase in the money supply. When there is an increase in the money supply, this thus leads to an increased inflation rate, which would be expected if workers and firms have rational expectations.

6 0
3 years ago
Carl Carpenter buys a drill press. The price, including tax, is $725.00. He finances the drill press over 24 months after making
netineya [11]
First calculate the amount financed
Amount financed=725−50=675

The formula is
I=(2yc)/(m (n+1))
Solve for c to get
C=(I×m×(n+1))/2y
C=(0.14×675×(24+1))÷(2×12)=98.44

Total of payments=675+98.44=773.44

Monthly payment is
773.44÷24=32.23

Hope it helps!

7 0
3 years ago
Read 2 more answers
Logan purchased a rental home and lot for $150,000. Her expenses totaled $5,000. Lots in the area sell for approximately $10,000
lana [24]

Answer:

The correct response is "145,000 ".

Explanation:

The given values are:

Purchased cost,

= $150,000

Expenses,

= $5,000

Selling cost,

= $10,000

Now,

Logan's basis for depreciation will be:

= Purchased \ cost+Expenses-Selling \ cost

On putting the values, we get

= 150000+5000-10000

= 155000-10000

= 145,000 ($)

3 0
2 years ago
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